Last week, the Nigerian stock market witnessed substantial activity in the financial service sector, primarily driven by three prominent banks: Access Holdings Plc, Guaranty Trust Holdings Company Plc (GTCO), and Zenith Bank Plc. These banks collectively accounted for 26.1 percent of the market turnover, emphasizing their dominance in the sector.
The financial sector maintained its position as the leader in trading volume, with a remarkable 1.4 billion shares valued at N22.2 billion exchanged in 17,300 deals. This accounted for a significant 72.9 percent of the total equity turnover volume and value.
Despite a slight decline in the all-share index (ASI) on the final trading day of the week, the local bourse concluded the week on a positive note, marking its ninth consecutive week of favorable performance. The positive outcome was fueled by increased demand for banking stocks, including Access Corp, Ecobank TransNational Incorporated, United Bank for Africa, and Zenith Bank, as well as notable gains in other major stocks such as Infinity, SCOA, MTNN, and BUA Cement. The year-to-date performance for the market stood at an impressive 41.2 percent.
The top three banks, in terms of volume, recorded a trading activity of 491.5 million shares worth N15.5 billion in 5,997 deals, contributing significantly to the overall equity turnover volume.
Following the banking sector, the services industry ranked second in terms of trading volume, with 97 million shares worth N616.265 million traded in 1,949 deals. The consumer goods industry secured the third position, with a turnover of 86.4 million shares worth N2.1 billion in 3,819 deals.
In total, investors recorded a turnover of 1.9 billion shares worth N31.6 billion in 33,020 deals on the floor of the Exchange. This was slightly lower compared to the trading activity on December 8, 2023, which witnessed a turnover of 2.4 billion shares valued at N45 billion in 34,704 deals.
Consequently, the index and market capitalization experienced a 1.2 percent appreciation, closing the week at 72,389.23 and N39.6 trillion respectively. Except for NGX Insurance, NGX ASeM, NGX Oil & Gas, and NGX Growth, all other indices finished higher. The NGX Sovereign Bond index closed flat.
Ambrose Omordion, the Chief Research Officer of Investdata Consulting Limited, commented on the market performance, stating that the Nigerian Exchange continued its upward climb due to increased demand for banking stocks. He also noted the ongoing portfolio rebalancing and the upcoming peak NGX earnings reporting and dividend season in Q1, 2024, which presents both challenges and opportunities for market players.
Analysts at Comercio Partners expressed optimism for potential upward momentum in the upcoming week, as stocks appear attractive for purchase. Cordros Capital, on the other hand, anticipated a mixed market performance, advising investors to carefully select fundamentally justified stocks given the weak macro environment.
Looking at the trading breakdown, Exchange Traded Products (ETPs) witnessed a decrease in volume and value, with a total of 64,401 units valued at N43 million traded in 559 deals compared to the preceding week’s figures. Bond trading also experienced a decline, with 32,044 units valued at N33.7 million traded in 16 deals.
During the week, 53 equities appreciated, while 32 equities depreciated, and 70 equities remained unchanged.